The Dow gained 2.87% today in what appears to be a late follow-through for the rally that began 11/28. The target is around 12800, which may be reached by year-end, or by mid-January at the latest. Thereafter, traders should be watching for signs of a top at the 2011 highs, and an ensuing correction that could last into May.
As I pointed out on Friday, sentiment had approached an extreme level, and on Monday we saw waning downside breadth which hinted at the possibility of a strong rally today. If the Dow can clear 12258, the bears will have been pushed to the sidelines once again.
The target for the Qs is 63 to 64.
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